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tv   Bloomberg Markets European Close  Bloomberg  February 15, 2017 11:00am-12:01pm EST

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when it comes to our monetary policy, i think independent federal reserve for the purposes of monetary policy is very important. also regular. that's really what i'm interested in what you do in terms of regulation. let me just ask -- do you think it's appropriate for congress to have oversight of the federal reserve's rulemaking and regulatory policies. ? chair yellen: of course. rep. mchenry: do you think congress should have oversight within international bodies as well? chair yellen: congress is assigned various regulatory agencies responsibilities. rep. mchenry: i'm asking you -- chair yellen: we have and believe should have discussions with our international colleagues. rep. mchenry: i will get to that
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question and i certainly understand. congress has given you this authority and this directive. should congress not also have oversight over that authority in which we've given you? chair yellen: congress, of course, has oversight over our conduct. rep. mchenry: you agree both domestically and internationally that we should have oversight over those rulemaking activities. in accordance with that, i sent you a letter from a couple weeks ago. thank you for the reply. i don't actually like the contents of it, but thank you for replying in a timely fashion before the hearing. i asked for your assurance about your participation in these international agreements for you to posit and tell the new administration, who has a markedly different approach to and has got their appointees in before you finalize any discussions internationally.
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chair yellen: you know that nothing is a rule that is effective in the united states until regulatory agencies have gone through a normal rulemaking process . nothing in these international finds the u.s. regulatory agencies, including agreements carry out in our own rulemaking's in the united states. rep. mchenry: i certainly understand that. chair yellen: important cases indicated that we don't agree with outcomes of international discussions and have no intention of putting in place -- rep. mchenry: in other cases we cannot surmise whether or not your representative from the fed has voted in the affirmative or the negative on these agreements .
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as your agency comes back and force upon us international beenment, there has not one appointed on because we cannot surmise if you have voted yesterday n -- yes or no. what we want is transparency in this. transparency has been severely lacking. my question is very simple. when it comes to the basel for waitge, do you intend to to see if the new administration has an opinion on these matters before you make some agreement on the basel four package? chair yellen: these are all ongoing discussions in which u.s. regulators participate. as i said, nothing is effective in the united states unless we go through a rulemaking process here. summarizery: i will that you will probably not
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wait for the new administration to put regulators in place, even if those new regulators are in place and move to counteract exactly what you have achieved within international agreement. yesterday before the senate banking committee, you seem to endorse the core principles of president trump's financial regulation executive order. what steps are you taking to comply with the executive order directive to advance america's interest in international forums , specifically as it relates to international standards like a net funding ratio and international insurance regulation? of theellen: in the case international insurance regulation, weinternational inse regulation, we indicated that the capital standard proposed is not one we think is suitable to be put in place in the united states. i think that's a good example of the fact that matters that are
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discussed and may be agreed on by others are not effective in the united states unless we have gone through a full rulemaking process with opportunity for comment and response. chairman: the time of the gentleman has expired. the chair now represents best recognizes the gentleman from massachusetts. >> you said earlier and you agree with the core principles enunciated in the presence executive order. i just want to read a couple of them -- to empower americans to make informed choices, to prevent taxpayer-funded bailouts, to foster economic growth in vibrant financial markets, and restore public accountability. agrees with those core principles, but i do not see anything in here that specifically says that dodd-frank has been a failure and needs to be repealed. did i miss it? i don't see anything here that says any specific relation at
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any level needs to be repealed or amended. did i miss that? is that in the corporate the bulls? e principles?ate chair yellen: this should be about the review. rep. capuano: this is about motherhood, apple pie, and puppy dogs. this executive order, wonderful and very powerful, means nothing. it's to promote the financial stability of the united states by improving the accountability of the financial system to end too big to fail and protect the american taxpayer and consumers from abusive financial practices. excuse me -- i was reading the wrong thing. that is actually the preamble to the dodd frank bill. sounds very familiar, doesn't it? i could have mistaken that for the president's executive order because, again, who could oppose any of that? that is wonderful. i'm glad that we all agree that
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the presence executive order is very powerful. don't you love greg meeks? he hit that nail so hard and so well. the ball is still flying over the fenway park. i will tell you. it was a great way to leave this and i've almost nothing further to say, but i will try. just out of curiosity, madam chair, do you or any of your high-ranking staff on any banks? chair yellen: no. rep. capuano: do you own any stock in any banks? chair yellen: no. rep. capuano: do any of your immediate family members own any banks or stock index? banks? chair yellen: no. rep. capuano: therefore you have note you molly men in to anybody at the federal reserve. chair yellen: we have a stringent set of ethics requirements. rep. capuano: so you think it would be unethical if any of
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your high-ranking staff or any of your family members were to financially benefit from the work that you do? chair yellen: it would be a conflict of interest for us . rep. capuano: that is good to hear because apparently not everybody agrees with that approach. to me it has been a little troubling. i'm glad to know that you and your staff and your family have high ethical values. i wish everyone tried to do that , but i guess that's another discussion for another day. i know there have been a lot of concerns about making these banks get rid of all these regulations so they can get rid of all that capital money just sitting there doing nothing, which of course is not right, but that's ok. i will take that. as i understand the capital requirements, and correct me if i'm wrong, if i go to a bank and deposit $100 in my checking account, i know that there will be some fees that i have to type say, but effectively, the bank is then required to pretty much
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hold six of those dollars in a capital account. roughly 6% of what i deposited. that doesn't mean it is sitting there, but that's what they have to do. up, or ifk goes belly i just want my money back, the bank says if they have a problem , they made bad choices, the economy has gone south. maybe there's a president who cut taxes too much or got involved in too many wars that you didn't want to pay for, but if anything happened and i went to the bank and it was a run, i could only get six of my dollars back based on this capital requirements. do you think that is sufficient with 6% of their assets held in capital? we have liquidity requirements, which would take some of your deposit and require them to hold it. rep. capuano: they don't have the share of my hundred dollars
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or 70 or 80 or 20. chair yellen: we want to make sure that the lungs of the banks make art -- rep. capuano: i'm not arguing. you are the professional. you think roughly six dollars is sufficient to cover the needs? chair yellen: we have a number of different ways to gauge the capital. rep. capuano: some people are saying my god that's too much. we can't keep that six dollars. chairman: the time of the chairman has expired. thechernow recognizes chairman of the institutional subcommittee. >> chair yellen, thank you so much for being here today. crusher course for my friends across the aisle. if you look at the gdp growth for the last several years, every year, it is less than it was the year before. if i recall my high school math teacher, they would call that a negative trend line. along that line, your testimony
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in the banking committee and the senate painted a very rosy picture of lending in the united states, especially for small businesses. study confirming that thought. what you fail to mention was that 65% of the businesses that responded to the survey had no intention of borrowing. why did they not want to borrow any money? that's the question. that's the concern. chair yellen: i think that's a legitimate concern that small businesses haven't seen rapid enough growth in their sales and business overall that they feel the need to borrow. of course, that is a concern . rep. luetkemeyer: i go home every weekend and talk to my small business oaks and it has been regulatory onslaught for them. part of that is making regulation, which makes it difficult to get access to credit.
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i will give you one quick example. a banker friend of mine sold his bank to a larger bank. the executive officer stayed at the bank. over the last year, they made three lungs -- three loans. that's the kind of restriction that's going on in the real world. i guess the question to you is -- when is the last time you talk to a small business owner? do you talk to small business owners at all? chair yellen: we have groups that come in regularly to meet with me and other board members . rep. luetkemeyer: when was the last time? last month, last year? chair yellen: probably within the last several weeks. rep. luetkemeyer: have you talked to a former lately? he is a small business per son. chair yellen: not recently. rep. luetkemeyer: one of the other concerns i have is because
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of this onslaught of regulations, especially in the banking community, you are one of the regulators. their other groups here that are problematic, but the onslaught of rules and regulations -- and , there state of missouri were 44 banks total. they totaled under $50 million. , ay serviced the community very small import and community in my state. 26 of those lost money. 2015 the 44 lost money in of those small banks. now those are all targets for either closure or merger. that is very concerning because as i just stated, you wind up with a small bank being absorbed by larger bank. it cuts the ability of small businesses to have access to credit as well as the consumer with home loans or what. that gets me then to my next is the, which
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clearinghouse came up with a study, a report on your c car. in there, it makes the statement that the feds process is forginging lending and economic growth come up tightly in small business and mortgage lending. what would your response be to that? chair yellen: i think that the highly flawed study. and i would disagree with its findings. i would go into detail about what some of the flaws are with the methodology could rep. luetkemeyer. rep. luetkemeyer: give me an example please. chair yellen: one flaw is that the clearinghouse estimates effective risk weights produced by stress tests by looking at the average quality of bank portfolios and not the quality of marginal or new loans. that is a huge difference because the existing loan
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portfolio often has loans that were originated that are encountering problems. rep. luetkemeyer: i don't disagree with you on risk waiting. as i go through the chart here, it's amazing to me. you wound up having more capital when you're risk rate for small business loans needed for commercial and industrial loans. can you explain that? chair yellen: our stress testing methodology tries to take a forward-looking and institution specific approach. rep. luetkemeyer: let me reframe the question. if you have a small business loan at $50,000 and a large million,l loan at $50 100 times larger in size, tell me where the most risk is to the bank. chair yellen: well, i don't think that is the difference in rescu risk weights implicit in our stress tests. chairman: the time of the john
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nunn has -- the gentleman has retired. >> thank you, missy on for your appearance today. -- miss yellen for your appearance today. proposalstrump's would have far-reaching negative consequences for the economy. these harmful policies, rolling back the dodd-frank reform and cutting taxes for the wealthy and curtailing immigration and deporting undocumented immigrants, adopting a protectionist trade policy, illuminating the affordable care act, and cutting back the social safety net for the vulnerable population. the president has also reversed a planned federal housing administration mortgage
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insurance premium cut that would have saved homeowners $500 a year. it may not be much to some, but for a lot of moderate income americans, that means something to them. agenda to the trump be harmful to hard-working american families and ultimately would be catastrophic for the whole economy. here's my question. recession of 2008, some kind of our financialr institutions, including the creation of the cfpb, have we
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not learned anything since 2008? now we have this effort to roll back these regulations. what do you think the impact will be on our economy if we do this in a willy-nilly way? chair yellen: so looking back, i think we know the consumer andes in lending securitization mortgage lending were an important contributor and the financial crisis. financiala source of and stability in the future if we are not attentive to those areas and potential abuses. rep. clay: do you believe that the consumer financial protection bureau has done a pretty good job of protecting our consumer and getting the ?oney back
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it has been like the backstop for a consumer. let me hear your opinion on cfp b. chair yellen: it is really for you to evaluate your judgment on their performance, but they had a broad agenda and taking on attempts to regulate many important areas. rep. clay: thank you for that response. downw that unemployment is . however, i think more work still needs to be done to reverse decades long inequality that has left middle-class workers, low income families, and minority communities behind. generational and systemic to distortcontinue progress and opportunity for tens of millions of americans
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. what can we ha do to address some of those? chair yellen: i agree with that and i think this ongoing inequality is something that congress should focus on. i think there are many public policies that are relevant and largely not in the domain with the fed. they would, for starters, involve focus on education training, community development, and other things that would successthe chances for in communities that have had starkly serious labor market problems. rep. clay: i appreciate that response, which tells me that congress should be about helping this economy and going about the business of job creation. not looking to roll back regulations that are there to
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protect the american consumer. my time is up. thank you so much for your engagement. chairman: the chair now recognizes the gentleman from michigan, mr. huizinga. >> thank you, mr. chairman . chair yellen, good to see you. this is my first time not to engage you as chair of the monetary policy and trade. i want to move on to a number of issues. do you plan to have lunch as secretary mnuchin as often as you did with secretary lew? chair yellen: yes, absolutely. i look forward to a strong relationship. >> we pulled your public calendar and over the last three years there were 68 official meetings that you had with secretary lew. you had 32 meetings with members of congress, including eight with a ranking member and two with the chairman, and one with
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myself as chair of monetary policy. i think that is one of the reasons i have advocated for you to come more often. that's part of the reform act that we have put in place a requirement to come up four times a year. wasow some thought that burdensome and intrusive, but i think it's good communication. i appreciate you being here today. does the economy still need improvement? chair yellen: well, that's a very broad question. rep. huizenga: it would seem either yes or no. chair yellen: in many dimensions, yes. rep. huizenga: i will take that . abigail: there are many display aspects of economic proposals . rep. huizenga: i will fully admit that there's incongruent data points and conflicting information that brings a couple jokes to mine. have you ever seen a one-handed economist? no? there are liars, dam liars, and
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statisticians. i think we have heard some of those. what is the you six unemployment rate right now? chair yellen: i believe it is 9.4%. rep. huizenga: that is information i have as well. you talk about that on page one. you do not specifically talk about it, but you talk about the unemployment rate being one 4.8%. you don't mention the 9.4%. b is a charmingly phrased ascription here -- you use charmingly phrase discussion here of those marginally attached to the labor force to describe the six. i think that is quite problematic. isn't it true, chair yellen, that we are in the shallowest and tepid recovery in the modern era since world war ii? chair yellen: it took a long time for the economy to remove labor market slack and get unemployment down. rep. huizenga: that sounds like a yes.
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for an economist, that's pretty direct. chair yellen: is it not true that the obama administration is the first administration since world war ii in the modern era which has not returned the economy to prerecession levels? chair yellen: i would say the economy is at prerecession levels now in terms of the unemployment rate and other measures of the labor market. rep. huizenga: unemployment, not you six. been true that there have been 30 quarters -- not months -- 30 quarters of recovery? chair yellen: yes. rep. huizenga: pretty tepid recovery, don't you think? it has taken 30 quarters to recover to that level, even if it's close. chair yellen: well, we have had a very deep downturn. rep. huizenga: i fully understand that. chair yellen: isn't it true that labor force participation rates are low?
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rep. huizenga: that's because we have an aging population. hold on. i have to throw the flight on that one because there's an m.i.t. economist report that just came out that recently found that younger workers are not entering the labor force, but older workers are. that's the only growth area. the only demographic seeing increases his older workers. you're starting to sound a little flimflam. no, no, it's because were an aging demographic. the only demographic entering the workforce according to the study is the older worker. chair yellen: the labor force participation rate of all the workers is rising, but their prevalence, they work very much less although they work more than previous generations did. rep. huizenga: they are hard workers. i'm the product of one of those
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. chair yellen: it falls dramatically when people get to the retirement years and there are fractions in the u.s. population increasing. rep. huizenga: isn't it not true that if we would throw off the shackles of unreasonable regulation that we would've had a faster, steeper recovery? i mean -- i would generally not agree with that. rep. huizenga: you would generally not agree with that? more regularization -- regulation would've caused faster recovery? chair yellen: by cleaning up financial institutions and cleaning up capital buffers -- chairman: the time of the gentleman has expired. the chair now recognizes the gem and for massachusetts -- derailment for massachusetts, mr. lynch. rep. lynch: madam chair, welcome
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back to the committee. i do want to talk about a couple of statements coming out of the white house, similar statements made by the chairman and his bill, by financial choice act. there have been substantial complaints that the rebel of a -- level of regulation created in dodd-frank has prevented small businesses and other businesses from getting loans. i'm in massachusetts. i realize it may be an outlier. we have a very strong economy and the lending institutions there, i would say the environment is very robust. evidencee any that folks aren't getting loans? i've not run into any evidence of that. chair yellen: well, core loans lending has certainly increased, search.
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. survey evidence that i've cited from small business owners suggests that they do not see an adequate access to credit as a significant problem. the national federation of independent business. vonnie: we're going to go now to the white house. retail ceos are taking the podium following the meeting with the president. >> to my knowledge, the retail industry has never been to the white house or had the opportunity to meet with the administration or key members of his team and we have the opportunity today and we are grateful for the opportunity. today we had a positive and productive discussion with the president and his team about the important role that the retail industry plays in the american economy. 42as retailers provide , us directly and those that provide the services.
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42 million jobs in america. we look forward to carrying on the conversation with the president and his team as we continue to look to move the interest of our industry, our employees, and most importantly the consumers, the hard-working american consumers that we all serve. we thank you very much. have a great day. >> [indiscernible] that borrowing route for small businesses would not show up in these numbers. generally access to business lawns looks to me by most back-checks -- by most metrics to be quite accurate. rep. lynch: one of the other efforts in the dodd-frank repeal and the financial choice act would be the repeal of the orderly liquidation authority that was included in dodd-frank
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to preclude taxpayer bailouts in the future. consistentlyted against the bailouts for our banks because people in my district didn't even have bank district that didn't even have bank accounts were being asked to bail out the banks who had put our economy in the toilet. what do you think about removing the orderly liquidation authority in dodd-frank? chair yellen: i would not want to see it removed, although i do think bankruptcy should be the main vehicle for resolving the distress. we have put in place detections that make it much less likely that a firm would fail and an sure that if it did, they would thatere would be -- ensure if it did, they would need to recapitalize the firm. i know the choice act proposes changes to the bankruptcy code
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that i think would be helpful in making bankruptcy work as a preferred option, but i think orderly liquidation is a backup procedure. we do not know what the circumstances might be in which a firm might fail. an issue in bankruptcy is that firms commonly need liquidity. they need access to the equivalent financing -- title 2 provides that kind of liquidity and puts the burden on the financial sector itself, not u.s. taxpayers for bearing any burdens that maybe incurred and i continue to worry with bankruptcy although we are working closely with firms to make sure they have liquidity plans that would enable an orderly bankruptcy that is
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always a concern. >> much -- mr. chairman, my time has expired. >> the chair now recognizes the man from wisconsin. mark: let's break away from this, the fed chair testimony. european stocks are on track for the seventh consecutive daily increase. july the 20th. also the highest level for the stoxx 600. inflation is the big focal point today highlighting the debate around the next move in u.s. interest rates. let's have a look at the currency board today. sterling is falling once again against the dollar. we had some jobless data which was strong. employment is at a record. basic pay growth slowed in the quarter and that is putting downward pressure on sterling.
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euro up against the dollar and sterling is little changed. the euro up against the dollar and let's finish with the bond market. check out the yields of the big four players. unchanged in the u.k. a slight upward kick in germany are seeing a selloff in treasuries and a move up in the dollar. more evidence inflation has taken hold in the u.s. economy. let's get back to fed chair testimony to the house services committee. chair yellen: it is not the only risk, but systemic -- is generally true that the rises -- biggest banks give rise to the largest systemic risk. i want to clarify that i think we should be concerned and should be concerned with regulatory burden and if i haven't made that clear, that is an oversight on my part. decree that regulation
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was the key factor resulting in slow growth, but we are concerned about regulatory burden. i am committed to doing everything everything -- that we can to reduce it and i want to make that clear. >> thank you for the clarification. i appreciate that. you will acknowledge that it is the factor the size of a bank related to systemic risk. since dodd-frank has passed, have the largest banks in america gotten bigger or smaller? chair yellen: probably bigger. that istative duffy: right. have we seen an increase in the number of small community banks that role parts of the country or are we seeing a contraction of smaller community banks. chair yellen: there is a consolidation. representative duffy: we have seen big banks get bigger and a ofsolidation or eradication
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small community banks and credit unions. a question for you in regard to the crisis. did mortgages have anything to do with the oa crisis? chair yellen: of course. rep. duffy: and you know what reform came from dodd-frank in regard to mortgage-backed securities? fannie mae reform to onefreddie mac to address of the great causes of the crisis which was mortgage-backed securities? chair yellen: it remains an open question. rep. duffy: right because one of the main drivers of the crisis were not even addressed. they did nothing. on the root driver of the crisis, they left it alone, which is concerning for us.
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fully in the next year and a half we will be able to address 's, but the promises were great about all the good that would come from dodd-frank, but what hasunderestimate happened since it has been passed where big banks have gotten bigger and we have seen small community banks that serve my community -- it is nearly impossible for them to survive with the regulatory burden. i was going to ask you about legal participation rate and the lack of this president hitting 3% -- the last president hitting 3% growth. abouthis conversation border adjustment tax, do you have any opinions on the conversation now taking place in the house and the senate and the white house and what that does to bring jobs back to america
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and what that does to the economy? chair yellen: i don't think it is appropriate for me to weigh in in detail on a specific measure. rep. duffy: 30,000 feet. not just specifics. well over 100 countries have some border adjustment, right? chair yellen: it is a complicated policy -- the effects of which -- rep. duffy: but many countries have this. chair yellen: yes, in connection of -- with back taxes. >> the chernow recognizes the gentleman from georgia, mr. scott. representative scott: i want to thank you for our work over the past two years together in dealing with and addressing this alarming high unemployment rate in the african-american community and that is especially rampant within the african-american community of young african-american men ages
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18 to 39. i also appreciate your suggesting to us when we discuss that and i will never forget what you told me "inflation and unemployment is indeed your cool mission, butal when it comes to unemployment like this, you have only a blunt instrument and what we should do is develop legislation." in response to representative clay, you reiterated that. now we have done that and we have two very important pieces of legislation that address that. by myself and my cosponsors kevin cramer of north dakota, republican, my good friend reverend emanuel cleaver, democratic cosponsor from missou andedia love -- mia love,
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the representative from ohio, along with pete sessions. we need some help in getting a meeting with the president of the united states. , as you know, the job component and training will be attached to his efforts to rebuild the crumbling infrastructure. secondly, the administration of this part of our legislation will be through his secretary of labor and then on our education fore in which we are asking $95 million to help. these struggling, hard-working institutionscan like tuskegee university in prairie view in texas and
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lincoln university in missouri, we have been unable to get any meeting. we are at that water -- dead water and i call upon you to ask president trump if he would be kind enough just to give me and my cosponsors an opportunity to come over to the white house and talk to him about these bills because it has to be a partnership here. his administration would have to administrate, we can only produce the policy, but if we can't get a chance to get in and talk to the president, how are we going to get this by him and chair yellen, you know, president bush said on numerous occasions he wanted to help the african-american community. do you have to
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lose?" he said over and over. i ask you to put unemployment -- the unemployment side of your mission hat on. nobody, no federal agency has unemployment as a mandate as the fed does. you have good credit to be able to go to president trump and say "i am not endorsing any legislation over there, but ofre is a very good package bipartisan legislation that goes to the heart and the soul of the most devastating issue facing the african-american community today." tell him that we now have more african-american young men ages 18 to 39 in the prisons or on
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probation or parole with felony convictions, all hope is gone for them, but the problem is, there is a train leaving more and more of these young men there. if we can get those scholarships into these african-american colleges for these kids, the agricultural, business, science and technology is reaching out and i thank you for your efforts in doing that. thank you. >> the time for the general man has expired and the chair now recognizes representative wagner. representative wagner: thank you for joining us today. i noticed yesterday before the senate banking committee that you agreed with the core principles that were part of president trump's executive order, calling for the u.s.
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regulatory framework and i think you -- thank you for that. i hope you will work with treasury secretary mnuchin identifying regulations on the books that conflict with these principles. this executive order requires you to consult with treasury. what are you doing specifically to identify the red that inhibit these core principles? chair yellen: we look forward to working with the treasury secretary on this project and we will cooperate fully once it is under way. i think he has only been in office for a day. the process is not yet established, but we look forward to participating. forward to: we look hearing about that process and how you will be participating and coordinating with him. president trump has assigned a few other executive orders related to regulation.
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an executive order issuing a regulatory freeze and an order repealing two regulations for each new regulation proposed. i understand that the federal reserve as an independent agency is exempt from these executive orders. however, the you plan on volunteering to comply in any capacity with these orders? chair yellen: in the past, where there have been similar phrases put in place -- freezes put in place, when the fed has had rulemaking that has been well telegraphed underway for a long time, it has continued with the regulatory process. i would expect -- there is nothing that we have put in not wellently that was understood or ready or most of
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what we would be looking at would be notices of proposed rulemaking where there would be plenty of opportunity for comment by those who might be appointed to the board members of congress and others. chair yellen: i thank you for that and i hope you will be willing to voluntarily comply with these orders as you go forward when it comes to any vetting.l rule as you know that has been discussed in this hearing, the position of chair has remained vacant since dodd-frank and i hope the president will nominate -- this governor that has been performing that role in the inntime will be resigning april. what remaining regulatory agenda
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items are being planned until he leaves? chair yellen: we have a relatively light schedule. we do have one possible rulemaking. rep. wagner: what is that? chair yellen: i don't know what the timetable would be, it pertains to the stress test and what is called a stress capital buffer that came out of our five-year review. i don't know just what the timetable is. it has been in the works a long time and i think the financial community is aware. rep. wagner: do you think there is a benefit to waiting until we are able to nominate and -- nominate a vice chair? chair yellen: there would be a notice of proposed rulemaking and a new vice chair for supervision would certainly have a chance along with others to weigh in on that.
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rep. wagner: thank you. in my limited time i applaud the federal reserve for providing limited relief to financial institutions from the qualitative portions of stress tests. as you know, the gao issued a report last year with several criticisms and recommendations regarding the stress test process, particularly in regard with transparency. what are the fed plan for implementing those recommendations? chair yellen: we value those and intent to implement them. rep. wagner: does the fed have any plan on doing a more competent the review of how they conduct stress test? chair yellen: we are completing a five-year review that is comprehensive and the changes that relieve the burden for a large number of medium or larger size banking organizations, that is one of the outcomes of that. rep. wagner: thank you.
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thehe chair now recognizes gentleman from texas, mr. green. youesentative greene: thank . jobhave done an outstanding in my opinion and you tried as best you can to help us maintain your mandate. i would like to mention that president obama has made efforts and many members of congress, david scott just mentioned his efforts to bring down unemployment as it relates to african-americans, more specifically african-american males. congressman jim clyburn has a -30. he calls 10-20 the president had a jobs act, there have been efforts made to try to bring down the high rate of unemployment in the african-american community as communities,her
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but it seems some of the this processlude or premise that we can engage in expansionary contraction. there is a fiscal austerity program that has been implemented by my colleagues on the other side and these things have actually, in my opinion, been a hindrance. even that congress have not acted appropriately and given that there is this high rate of unemployment in the african-american community, i am calling on the fed to do a little bit more and i ask that you do this because i have received an executive summary that i would like to share with you titled experiences and perspectives of young workers from december 2016. this summary gives me information including the following.
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the federal reserve conducted its first survey of young workers over november and december 2013 to develop a deeper understanding of the forces at play. youngf the reasons why workers may have employment problems. in december 2015 the federal reserve conducted a second survey to further explore market issues and trends among this population. you go on with this report to indicate some of the outlook expectations. young adults with a paid job are more optimistic than those without a paid job. among young adults, steady employment remains more important than higher pay. .hat is important you go on to indicate that many young adults earn early work experience during high school, holland -- college, or both. early employment develops good work ethic.
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then full-time employment also correlates with a positive outlook and job satisfaction. what you have done with this survey -- this report is get some sense of what is happening with young adults. i have not seen a similar report for the african-american community. does such a report exist? if it does, i would like to peruse it. if it does not exist, i believe you have the mandate and the authority to produce some -- such a risk. at some point we have to study and give empirical evidence as to why african-american unemployment is almost always twice that of white unemployment. of time, anyod president, any administration, and this is a significant number you will find. twice as much as white
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unemployment. we need the appear goal evidence so we can use that here in -- empirical evidence so we can use that here in congress. can the fed do this? if it has already done it, i would love to read the report. chair yellen: i am not aware that we have already done it, but we have a great deal of research going on in the fed and i would encourage people at the fed and we will discuss it with them trying to look more carefully at this. rep. green: let me assure you that this will be a quantum leap forward to receive mp or goal -- empirical evidence from the fed as to why we have this constant number of two times white unemployment. that would be a quantum leap forward. i am going to beg that you do what you can to get this done such that maybe when you are back next time we can discuss
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these issues related to why african-american unemployment is so high. i would also add this, much of what i read here explains some of what is happening in the african-american community. no summer jobs, no jobs early in life, not an opportunity to develop work ethics. these things are important and i beg that you help us. >> the chair now recognizes the gentleman from new york. : i amresentative keating worried about proposals that would change the ofmc. it strikes me as misguided since the new york fed has responsibility that no other industry bank has. you discuss some of the differences between the new york red and the other district banks and would you say the new york
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fed has unique knowledge of the markets? chair yellen: the new york fed has long had a special and important role in the federal reserve system. it has long been the bank that is involved in the markets for us, conducts our open market operations, plays an important role in gathering market intelligence and understanding financial market trends, and because so many, especially large banks, are headquartered in new york, has a very large supervisory staff that plays an important role in the program and the decision that the president of the new york fed chair serve as the fmoc reflects that traditional role.
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i think it is something that has worked well. rep. king: not to put you on the spot, but the president of the reserve bank of san francisco, atlanta, and chicago have publicly said they support the current structure of the fmoc and a permanent seat for new york. do you agree with that? chair yellen: i think we have a structure that works well and i --not leaking changes seeking changes to that aspect of it. rep. king: i will not push my luck and i will accept that answer. >> the chair recognizes mr. cleaver. representative cleaver: thank you madam chair. saturdays ago in missouri a town reside, i held 1100 --ting of about
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11,000 that showed up on the executive order on immigration and people showed up with great fear. this past saturday i was in baltimore saturday evening and all of a sudden my cell phone started ringing, one call after another and there was widespread panic in kansas city in the clergy community, across catholic, protestant were all people were calling each other that ice would be at churches on this past sunday arresting immigrants, undocumented in -- undocumented immigrants. it was such a big deal that your staff or my staff would like to check. it is a front-page story on "the
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kansas city star." all four networks did stories. they were calling and asking how many ice agents were coming in and so forth. it was an awful kind of a thing and i feel terrible because i was in baltimore and unable to .e there how this connects with you is i am just wondering if there is some success at the porting -- 11 porting -- deporting million immigrants, do you think that will have any impact on the american economy if we were just to get rid of all the undocumented workers by next thursday, do you think that would be any impact on this economy? chair yellen: immigration has been an important part of labor force growth in the united
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states for some time now. we are in a period in which one fact responsible for slowing growth is slower labor force growth and a radical change in immigration would certainly affect the potential of the economy to grow. conveyeaver: i will that. many preachers were concerned because they read about the guy who said i was a stranger and you took me in. it is a book and so based on that they thought they had an obligation to respond affirmatively. the other thing is i think it fed did ar 2011, the collapsethe housing that we experience that triggered the 2008 economic
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years,on and over the for whatever reason, the gse's have been blamed for the economic collapse, that they set policies that allowed them to give loans -- they don't give loans, they are buying loans, but they were blamed for the economic collapse. .our study says otherwise can you shorten that into a paragraph? a wide range of problems in the market -- mortgage market led to the se's wered the g probably not the critical part
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of what caused it. rep. cleaver: i had too many questions. repealeffort to dodd-frank, there is a section in their where the wording is not as strong as i am saying, but essentially saying we're going to get oil companies the elected officials so weicials in countries are removing a section of --d-frank so bribery is now is now again apart in the way in which u.s. companies -- my time has run out, i apologize. >> the chair wishes to advise members that i intend to recognize mr. royce, mrs.


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